Marcia Zarley Taylor reported yesterday at DTN that, “The ghost of the Southwest’s mega-drought continues to haunt growers even after a few rain showers this last growing season. Producers there have been used to paying dearly for each dollar of crop insurance coverage, but the cost-benefit ratio could reach a breaking point in 2015.
“‘Under old farm policies, lenders would look at your portfolio and see how much crop insurance guaranteed in gross revenue, than add in direct payments and that was the basis for your crop loans,’ said Matt Huie, a 38-year-old crop producer from Beesville near the Gulf Coast rim of Texas. ‘Now we’ve seen our basis for loans erode because of drought and erosion in commodity prices.’
“Texas state climatologist John Nielsen-Gammon describes prolonged drought in the Corpus Christi area as one of the two most severe in the region’s recorded history. Only the epic drought of the 1950s to the early 1960s matches it.”
“A federal judge threw out a six-state case late Thursday that asked the court to strike down a California statute barring the sale of eggs there that were produced by hens in cramped cages. Iowa, the nation’s largest egg producer, was part of the suit.”
From USDA’s Economic Research Service (ERS)- Most of the largest individual country markets for U.S. agricultural exports are in Asia and North America. China, with its strong demand for soybeans, cotton, cattle hides, tree nuts, and other horticulture products, has become the largest single U.S agricultural market, with annual U.S. exports averaging $23.5 billion during 2011-13. Canada (with 2011-13 average U.S. exports of $20.3 billion) and Mexico ($18.5 billion) are the second and third largest markets, with trade in a broad range of agricultural commodities aided by reforms introduced by the 20-year-old North American Free Trade Agreement (NAFTA). Japan ($13.2 billion) is the fourth largest U.S. market, and the next five top ranked markets are also in Asia: South Korea ($6.0 billion), Hong Kong ($3.5 billion), Taiwan ($3.3 billion), Indonesia ($2.7 billion), and the Philippines ($2.3 billion). Total U.S. agricultural exports were a record $144.1 billion in 2013, and averaged $140.6 billion during 2011-13. Find this chart and more in Selected Charts 2014, Ag and Food Statistics: Charting the Essentials.
Sabrina Tavernise reported in today’s New York Times that, “The amount of antibiotics sold for use in livestock rose substantially in recent years, according to the Food and Drug Administration, a pattern that experts said was troubling given the efforts to battle antibiotic resistance in humans.
“In an annual report posted online on Thursday, the agency said the amount of medically important antibiotics sold to farmers and ranchers for use in animals raised for meat grew by 16 percent from 2009 to 2012.
“Most troubling, health advocates say, was a rise in the sale of cephalosporins, a class of drug that is important in human health, despite new restrictions the F.D.A. put into place in early 2012. The report showed an 8 percent increase in the sale of those drugs in 2012, confirming advocates’ fears that the agency’s efforts may not be having the desired effect. Sales of those drugs rose by 37 percent from 2009 to 2012.”
The article noted that, “The National Chicken Council, an industry group, said in a statement that the sale of antibiotics did not necessarily correlate with antibiotic resistance trends. It said that most antibiotics used in chicken production were not used in human medicine.
“The report did not differentiate by species; it included all animals raised for meat.”
Oct. 1 (Bloomberg) — The U.S. and Brazil reached a $300 million agreement to resolve a dispute over cotton subsidies that has bedeviled the two nations for more than a decade. Alan Bjerga reports on ‘Bottom Line.’ (Source: Bloomberg)
Aaron Stanley reported yesterday at The Financial Times Online that, “The US and Brazilagreed on Wednesday to resolve a decade-long feud over cotton subsidies, marking an end to one of the highest-profile disputes in the history of the World Trade Organisation
“‘Today’s agreement brings to a close a matter which put hundreds of millions of dollars in US exports at risk,’ said Mike Froman, US Trade Representative. ‘The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.’”
The FT article stated that, “Under the agreement [Memorandum of Understanding Related to the Cotton Dispute], the US will pay a lump sum of $300m to Brazilian cotton farmers and modify its support for domestic cotton programmes. Brazil will forfeit $829m in WTO-granted sanctions against US goods and services annually – a portion of which had been allocated for cross-retaliation against US intellectual property rights.
“The $300m price tag for resolving the dispute is ‘small beer for the US’, said Frank Samolis, a trade lawyer with Squire Patton Boggs, adding that the agreement clears the slate for trade relations between the two countries after Brazil’s presidential elections, due this weekend.”
Reuters writer Alonso Soto reported yesterday morning that, “The United States and Brazil are close to settling a decade-old trade dispute over cotton subsidies, three Brazilian sources close to the talks told Reuters, in what would be the first concrete step to repair ties hurt by an espionage scandal.
“Washington is within hours of reaching an agreement with Brazilian cotton producers demanding compensation for cotton subsidies enjoyed by U.S. growers, a senior Brazilian government official said. He asked not to be named because negotiations are ongoing.”
The article explained that, “In 2004, Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization, giving it the right to impose $830 million in sanctions against U.S. products. Brazil agreed to suspend the penalty if the United States paid into an assistance fund for Brazilian cotton farmers [related background here and here].
“The United States stopped paying the monthly compensation in October due to budget disagreements in Congress, prompting the Brazilian government to threaten to slap higher tariffs on U.S. products. The retaliation would have deepened diplomatic tensions between both countries, officials and experts said at the time.”
Leslie Josephs and William Mauldin reported last night at The Wall Street Journal Online that, “Brazil and the U.S. have reached an agreement to settle a more than decade-old dispute over U.S. cotton subsidies, people familiar with the negotiations said Tuesday.
“U.S. Agriculture Secretary Tom Vilsack and U.S. Trade Representative Michael Froman will sign the agreement with their Brazilian counterparts on Wednesday, a person familiar with the agreement said.”
With respect to USDA Farm Bill implementation, Rep. Peterson noted that, “The Department has put a pretty heavy focus on getting this thing done. There’s been some controversy over the APH decision, which affects Texas and down in that part of the world, that I’ve heard about. The dairy stuff I think could have got going a little bit sooner, but that’s now being actively rolled out. We have our first meeting today in my district with the FSA folks and the University of Minnesota, and I’m going to attend one of those tomorrow to kind of see how that’s all going.
“We had the Secretary here last Thursday in Minnesota, and he’s announcing at that time the PLC/ARC signup. And that’s going to take some real study on the part of farmers to make sure that they understand the implications and have as much information as they can get before they have to make the decision probably sometime after the first of the year.”
From USDA’s Economic Research Service (ERS): “Crop receipts are expected to decline 7 percent in 2014, the second annual decrease following a record high in 2012. Even with record corn production projected, cash receipts for corn are expected to decline by over 20 percent due to a significant decrease (-32 percent) in the annual average corn price. Declines in receipts are also expected for most other major crops including fruits and nuts, wheat, soybeans, and vegetables/melons. A notable exception is cotton, which is projected to recover from a significant decline in 2013. Conversely, record livestock prices are projected to drive a 15.3-percent increase in livestock cash receipts. Despite expected declines in beef production, cattle/calves receipts are expected to set a record in 2014 due to higher prices. Hog production is also expected to decline, but higher expected annual average prices drive the forecast increase in hog cash receipts. Wholesale milk and broiler receipts are expected to benefit from higher production and record annual average prices. See the Farm Income and Wealth Statistics data product for more information on USDA’s 2014 forecast for the farm economy, released on August 26, 2014.”
On Friday, Don Wick, of The Red River Farm Network (RRFN), spoke with Secretary of Agriculture Tom Vilsack about Farm Bill issues.
An audio replay of the RRFN discussion can be found here, while an unofficial FarmPolicy.comtranscript of the conversation with Don Wick and Sec. Vilsack is available here.
In part, Sec. Vilsack indicated that, “As you know, direct payments, Don, are gone, replaced by a real focus on crop insurance and these new safety net programs, the Agricultural Risk Coverage program and the Price Loss Coverage program. Producers will have, starting Monday, the opportunity to reallocate—I should say the owners of the property have the opportunity to reallocate base acres and to adjust yields, and they’ll have that opportunity from September 29th to February 27, 2015. Starting on November 17, 2014, and continuing at least until March 31st of 2015, they’ll have the opportunity to make the election as to which of these safety net programs is best for their operation.
“To aid them in making that decision between now and the time they make the decision, we are also announcing the availability of an online tool that has been developed by several land grant universities and food policy councils that will allow producers to plug in numbers that are very specific to their own operation.”
AP writer David Pitt reported yesterday that, “Farmers can start as early as next week on signing up for new safety net programs that U.S. Agriculture Secretary Tom Vilsack said replaces the much-criticized direct payments with government payouts based on the risks farmers face.
“Vilsack traveled to St. Paul, Minnesota, to hold a news conference to announce the rollout of the programs on Thursday. He held a conference call with reporters to further discuss the programs and answer questions. The programs were established in the 2014 farm bill and will allow farmers to protect themselves against commodity price drops and from lower revenue in poor crop years.
“Payouts this year could be significant since anticipated record corn and soybean harvests have sent prices plummeting. At current prices many farmers are likely to lose money, a scenario that will enable them to collect government payments.”
Jonathan Oosting reported yesterday at the MLive Media Group Online that, “Some 150,000 Michigan families are poised to lose an average of $76 in food stamp benefits this fall due to federal cuts that many other states have taken action to avoid.
“The latest farm bill, signed into law here in Michigan last winter, scaled back the Supplemental Nutrition Assistance Program, which includes a provision affording extra food benefits to families who also receive assistance with heating bills.
“Some families who rent don’t have utility bills, but states had been able to help them qualify for extra food stamps by providing just $1 in heating assistance. Under the new farm bill, the minimum ‘heat and eat’ payment is jumping to $21.”
Gregory Meyer reported yesterday at The Financial Times Online that, “Illinois is at the centre of an astonishing rebound in global grain supplies. After almost a decade of shortfalls and price rises, agricultural commodities have declined to the cheapest in four years. The new abundance will have broad effects, weakening incomes of farmers and companies that supply them, fattening profit margins at food and biofuel companies and – eventually – slowing food price inflation for consumers in rich and poor countries alike.
“As the largest agricultural exporter, the US sets the direction for world markets, traders say. Illinois and other states in America’s Midwestern ‘corn belt’ are on track to produce a record US corn harvest for a second consecutive year. The soyabean crop will also be the largest ever, the government predicts.”
Marcia Zarley Taylor reported yesterday at the DTN Minding Ag’s Business blog that, “Plunging commodity prices are resetting potential corn payments under various Farm Bill options for 2014. The new calculations also point out how precarious price forecasting can be in assessing which farm program option fits each FSA farm. That’s why so many experts encourage growers to wait until December or January before making a firm commitment to their farm program choices.
“Whether ARC or PLC provides better protection is still a moving target. ‘When the Farm Bill was signed last February, it seemed like 2014-crop prices would make [farm supports] largely irrelevant for corn producers. Maybe it would be relevant for wheat and sorghum and solid for rice,’ Brad Lubben, a University of Nebraska economist and director of the North Central Risk Management Education Center in Lincoln, Neb. ‘Six months of bearish price news since then has raised the safety net for corn.’”
Late last week, Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network, spoke with House Ag Committee Chairman Frank Lucas (R., Okla.) about Farm Bill issues.
An audio replay and summary of the Chairman’s remarks from Thursday can be found here, while an unofficial FarmPolicy.comtranscript of the conversation with Ron Hays and Chairman Lucas is available here.
“The moves signal a growing concern over drug-resistant infections, which are linked to two million illnesses and 23,000 deaths in the U.S. each year, according to the Centers for Disease Control and Prevention. Some infections are almost entirely untreatable because the appropriate antibiotics have been rendered powerless.”